California has joined the fray of states adopting rules governing the discovery of electronically stored information in its courts.

California’s Electronic Discovery Act, which establishes procedures to govern the discovery of ESI in California state courts, was signed into law by Governor Schwarzenegger on June 29.

The California Act, which largely tracks the 2006 amendments to the Federal Rules of Civil Procedure, marks a growing trend among roughly 30 states that have decided to include provisions in their rules aimed directly at the discovery of ESI, according to an alert authored by David Lender, co-chair of the Complex Commercial Litigation practice at Weil Gotshal & Manges.

“The California Act is particularly promising given that it expressly contemplates cost-shifting as well as limits on discovery of accessible as well as inaccessible ESI,” notes Lender, adding that other states have begun to enact amendments to their evidentiary rules following the adoption of Rule 502 of the Federal Rules of Evidence relating to privilege and waiver.

Among other things, the California Act includes provisions:

Setting forth procedures for requesting and objecting to the form(s) of production of ESI, and requiring production in the form(s) in which it is ordinarily maintained or in a form that’s reasonably usable where the request doesn’t specify the form(s) for production;

Adopting the two-tier approach set forth in the FRCP by permitting a producing party to object to the production of ESI from a source that is not reasonably accessible because of undue burden or expense, but allowing the court to nonetheless order the production of such ESI if good cause is shown by the requesting party;

Expressly endorsing cost-shifting by providing that if the court finds good cause for the production, it may set conditions for the discovery, “including allocation of the expense of discovery”;

Adopting the burden/benefit analysis similar to that set forth in the FRCP, but expressly stating that it applies even to reasonably accessible ESI, so that a court may limit the scope of discovery of any ESI if it determines that the burden of the discovery outweighs the likely benefit;

Adopting the FRCP safe harbor for the failure to produce ESI lost as a result of “the routine, good faith operation of an electronic information system,” and

Adopting the FRCP privilege protocol by requiring a receiving party to immediately sequester and return, or present to the court for a determination of the claim, in the event that a producing party notifies the receiving party that it has produced privileged information in discovery.